Agriculture Committee on Feb. 27th, 2020

[Tom Rosser]

Yes, we are looking at the possibility of using those tests, but I'm not sure where we're at with that. Mr. Valicenti can probably give you more details.

[Marco Valicenti]

Agriculture and Agri-Food Canada, along with the Canada Border Services Agency and Trent University, is going through a round of testing. We are close to finalizing the next step, what protocol we should look at. We're hoping to see some additional information in the coming months.

That is still ongoing. I have to say it's been a really positive dialogue with the universities in looking for the right test for spent fowl.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

It's extremely important for producers back home, and they're patiently looking for the outcome.

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Drouin.

Mr. Lehoux, you have the floor for five minutes.

[Richard Lehoux, Conservative, Beauce, QC]

My thanks to the witnesses for being here.

I have a question about supply management. We talk a lot about risk management, but supply management is still an interesting concept.

A series of concessions have been made in recent agreements, including the one that is about to be reached. We are being told that a major loophole will be closed in the supply management system. All these mechanisms reduce the ability of the state to intervene. What are the prospects for these ventures? We should not go back to the practices of the 1960s when supply management did not exist and we were losing government support. Has the department looked at that issue?

[Tom Rosser]

Thank you for your question, sir.

Yes, we have put in place a process with a working group and industry. Two working groups have been set up, one for the dairy sector and another for the egg and poultry sector, to discuss the impact of market concessions in trade agreements and how to minimize that impact and fully compensate farmers.

In the dairy sector, stakeholders wanted to create a second working group with the government to develop a long-term vision for the sector. This was mentioned in the mandate letter of the Minister of Agriculture and Agri-Food.

We are in the process of setting that up by working with dairy sector stakeholders, not only to estimate and minimize the impact of trade agreements, but to work with them to develop a vision for the future of the sector.

[Richard Lehoux, Conservative, Beauce, QC]

As part of that work, have you ever thought of removing those products, which are subject to the supply management system, from existing trade agreements? Has that ever crossed your mind?

[Tom Rosser]

Yes, we have had extensive discussions with industry stakeholders about what trade agreements mean and how they will affect the industry in the future. That process has helped us to more fully understand their perspective on the impacts and on how to minimize them. Marco Valicenti and Kara Beckles were part of that process. I am not sure whether either of them would like to add anything.

[Richard Lehoux, Conservative, Beauce, QC]

I would like you to continue those discussions and, if possible, to share them with us here. I would be very interested in the outcome of your discussions.

On another note, the issue of labour that was raised earlier is a major problem.

On the subject of coordination between the various departments, many agricultural entrepreneurs in the field tell me that it's very complicated. Given the particular problems in this sector, could there be better co-operation between the departments of Immigration and Agriculture?

[Tom Rosser]

We work closely with our colleagues in the Department of Employment and Social Development and the Department of Immigration to make sure that the system works as well as possible.

I know that our colleagues at Service Canada have had to deal with an increase in the number of applications received in the last year. They have allocated additional resources to ensure that their administrative system is working as well as possible.

In addition, industry and the departments in question have formed a working group to directly discuss and resolve issues related to the system.

[Richard Lehoux, Conservative, Beauce, QC]

On the ground, producers are telling us that, in the past, they used to have delays of five to six months, whereas the wait is now 12 to 13 months. That is far too long. People are losing job opportunities.

[The Chair, Liberal, Pat Finnigan]

We are running out of time.

There is not enough time for a full question.

Mr. Blois, you have maybe two minutes.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you, Mr. Chair.

I want to go back to some of the points on the price on pollution and some of the information you have.

Just so I'm clear, this is not really the mandate of the Department of Agriculture. This would be more under Finance, in terms of economic gain, as well as Environment and Climate Change Canada, and perhaps CRA. They would be more responsible for tracking those numbers. Am I correct in saying that?

[Tom Rosser]

Yes, it is correct that within the federal government the policy leads for that policy would reside with the Department of Finance and the Department of Environment and Climate Change.

[Kody Blois, Liberal, Kings—Hants, NS]

In the graph, we talked about energy expenses, and it was referenced by the members across the way. Has actual energy consumption on farms increased in the last number of years? Do you guys track the actual amount of energy being consumed on farms?

[Tom Rosser]

Yes, we have data on that, and more generally the data shows that energy efficiency has been improving on the farm over time.

Kara may be able to talk to that in more detail. If not, I'll be happy to follow up with some additional data.

[Kara Beckles]

I hesitate to give a complete answer for energy, but I know, for example, on-farm fuel use has decreased over time as practices have changed. Machinery has become more energy efficient, and with no-till farming, fewer passes of machinery over the land has reduced fuel use over time. I can't speak to energy overall, but definite improvements in efficiency have reduced use.

[Kody Blois, Liberal, Kings—Hants, NS]

Moving very quickly to the graph, we talked about 13.3% and it says it was “due to price increases”, but would it not make sense if farmers were consuming more energy in a particular industry or in a particular activity on farm that this would play a role, not necessarily just in terms of price, but the actual energy consumed as a result?

[The Chair, Liberal, Pat Finnigan]

That will be a statement rather than a question. We'll have to end it here.

I want to thank the panel for coming to us this afternoon on very short notice. Thanks for the information.

We'll suspend for two or three minutes to get the new panel in.

[The Chair, Liberal, Pat Finnigan]

Welcome to the second half of our business risk management programs.

With us in the second portion we have, from the Department of Agriculture and Agri-Food, Paul Samson, assistant deputy minister, programs branch; and Francesco Del Bianco, director general, business risk management directorate, programs branch. Welcome to both of you.

You can open on this for up to 10 minutes if you wish. Do you each have a presentation? Just one, okay, go ahead.

[Paul Samson, Assistant Deputy Minister, Programs Branch, Department of Agriculture and Agri-Food]

Thank you, Mr. Chair.

Good afternoon, everyone.

Thank you for the invitation.

We're glad to be here today to give you some context on our programs. There are three things that I would like to talk about here in the few minutes that we have.

The first is to provide some context on the history of agriculture risk management programming in Canada, because there is quite a significant history there. Second, I will provide an overview of the existing program suite. Finally, I would like to outline the work under way with our provincial and territorial colleagues to evolve the programs to meet the needs of Canadian farmers.

Canada is one of the largest agricultural producers in the world, as we heard just now. It generated over $143 billion of Canada's GDP in 2018. Agriculture is at the centre of Canadian identity, and is a key to our long-term prosperity. For these reasons, there is a long history in Canada of government support for risk management in agriculture. Crop insurance, for example, has been in place in some form since the 1950s.

In the 1980s and early 1990s, risk management support for this sector was characterized by a series of regionally specific and commodity-specific programs. During that time there were also a number of ad hoc programs that responded to specific needs, but they didn't necessarily provide longer term program solutions. In addition, during the same time, a number of international trade actions were taken against the Canadian livestock sector in particular, due in part to differing support in the agriculture sector across commodities and regions. These events led to efforts to better standardize support for the sector, including the creation of the first agriculture policy framework with our provincial and territorial counterparts, which started in 2003.

That's a bit of history for you. Indeed, it goes back to the 1950s, but in 2003 we started with the new agricultural policy framework. This landmark agreement was the first in a series of five-year policy frameworks. We're now in the fourth of those policy frameworks. It established a set of cost-shared business risk management programs alongside investments to help the sector grow as well.

The issues relating to risk management programming have continued to evolve since that 20-year period when the program framework was put in place. Under the first two framework agreements, dating back to the early 2000s, the focus of program support was very much on income stabilization, although evidence emerged over time that government support was covering what would be considered to be normal business risks in many cases and was slowing innovation and adaptation in the agriculture sector.

Also at this time the sector was experiencing a period of rising commodity prices and therefore was seeing higher levels of profitability than it had in the past.

As a result, governments agreed to reallocate some support from business risk management programming into proactive investments in the sector to promote innovation and growth.

ln 2017, federal-provincial-territorial governments agreed to continue to focus risk management support on severe loss and disaster under the Canadian Agricultural Partnership, in order to help producers manage those risks that threaten the viability of the farm. ln addition to the significant investment in risk management, the Canadian Agricultural Partnership also includes a $3 billion investment in broader initiatives to help the sector grow, innovate and become more competitive.

The current business risk management programs are intended to function as a suite. Now I'm just going to outline what they are. It's not necessarily expected that every producer or farmer would use every one of these programs. They are intended to do different things, and farms work in many different ways.

There are five. The first one is AgriStability, which was already mentioned in your previous session. It's a whole-farm program that provides support to farmers when they experience a large income decline.

AgriInvest is the next one. It's a government-producer matched savings account that producers can draw on at any time to help manage income declines or increased costs or to make investments on their farm, so it's quite flexible.

AgriInsurance, often called crop insurance, provides subsidized insurance for production losses primarily for crop sectors, which helps protect farmers against natural perils such as drought, flood and disease.

AgriRecovery is a framework program that allows the two levels of government to work together to assess the impacts of an unexpected natural disaster, pest or disease event. Where appropriate, governments then develop initiatives to provide support for the extraordinary costs required for farmers to recover from the event.

Then finally in our business risk management programs, we have AgriRisk initiatives. These are available to help the sector investigate new risk management tools and approaches that can help support piloting new programs. For example, the western livestock price insurance program, which was developed a few years ago, is available to cattle and hog farmers in western Canada, and it's currently funded through that AgriRisk program.

Together these programs do provide significant support for the agriculture sector. They are federally and provincially cost-shared in a sixty-forty ratio, and in total they have averaged approximately $1.5 billion over the previous five years of the program I mentioned, so it's cost-shared sixty-forty.

Governments nevertheless recognize that the risks facing producers continue to change, particularly with respect to climate change and international trade.

Climate change is increasing risks due to the increased frequency of extreme weather events, and may also provide new opportunities for production.

International trade offers opportunities in new markets, and risks when access to existing or key markets is disrupted.

For these reasons, business risk management programs, not surprisingly, are under regular review. The system is constantly evolving. Reviews have highlighted the challenge in determining the balance of government support between market risk and production risk. These have worked to address farmers' concerns, in particular relating to the timeliness, simplicity and predictability of the AgriStability program.

Following the most recent review in 2018, federal, provincial and territorial ministers met in Ottawa in December 2019 to discuss progress on making targeted changes to the business risk management programs to better meet the needs of the sector. At that meeting, ministers directed officials to make two key changes to AgriStability right away for the program year 2020.

The first one was to incent farmers to purchase complementary coverage by allowing a new treatment of private insurance under the program to increase the incentives to use private insurance.

Second, understanding that administrative burden has been an issue for farmers coming into the program, ministers agreed to launch a pilot program in selected jurisdictions to make applying for support easier by using tax return information to simplify the application process.

Details of both of these changes are expected to be finalized very soon.

However, ministers also recognize that there may be opportunities to further evolve the programs, and to this end they have asked officials to report back to federal, provincial and territorial ministers in April on an assessment of business risk management programs to ensure they are aligned with the intended objectives. In addition, officials are to develop options to make the programs more effective, agile, timely and equitable for farmers.

It's a challenging period in the long-term evolution of business risk management programming. While our current suite of programs has provided significant levels of support to the sector in recent years, it is important to consider that these programs may need to further evolve to meet the changing needs of today's farmers.

While working closely with our provincial and territorial colleagues, it is important to advance options for ministers' consideration that will provide our farmers with the tools they need to grow and innovate.

Thank you for your time, and I look forward to your questions.

[The Chair, Liberal, Pat Finnigan]

Thank you very much, Mr. Samson.

We should start our questioning round starting with Ms. Rood.

I will also say happy birthday to you. You have six minutes.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chair.

Just for me, six whole minutes. Thank you, Mr. Chair. I appreciate that.

Thank you very much for being here today. I appreciate your taking the time to come in to talk to us about these important programs.

I have a couple of questions. Maybe you mentioned this earlier, but I'm just curious about how many farmers qualify for AgriStability and, of the farmers who do qualify, how many actually subscribe to the program?

[Paul Samson]

Shall I take the questions in order, Chair, or do you want to list more than one question?

[The Chair, Liberal, Pat Finnigan]

Yes, you can answer them at.... You know.